Kim owns 100% of the stock of Cardinal Corporation. In the current year Kim transfers an installment obligation, tax basis of $30,000 and fair market value of $200,000, for additional stock in Cardinal worth $200,000.
A) Kim recognizes no taxable gain on the transfer.
B) Kim has a taxable gain of $170,000.
C) Kim has a taxable gain of $180,000.
D) Kim has a basis of $200,000 in the additional stock she received in Cardinal Corporation.
E) None of the above.
Correct Answer:
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